weather icon Clear

Survey finds investors confident in markets

Nearly two-thirds of investors express confidence in the stock market, though it is still down from the first quarter of 2020.

Investor optimism improved moderately this quarter, with the Wells Fargo/Gallup Investor and Retirement Optimism Index rising 24 points to +42, about double the 14-point gain seen in the third quarter.

Still, investor optimism continues to fall well short of its first-quarter level, when the index was at a 20-year high of +138.

The Investor and Retirement Optimism Index is up this quarter specifically because investors are feeling better about the future of the economy and jobs. Close to half (48%), up from 40% last quarter, are now “very” or “somewhat” optimistic about the 12-month outlook for the economy. Optimism about the potential for unemployment to decrease is up seven-points to 40%, while optimism levels for the stock market (47%) and inflation (19%) are essentially unchanged.

The latest survey was conducted by web using the Gallup Panel, with 1,709 U.S. adults who have $10,000 or more invested in stocks or bonds, either individually or as part of a retirement or mutual fund. This quarter’s poll includes an oversample of 603 higher-income investors, defined as having $240,000 or more in household income.

“Investors were absorbing a number of significant developments in the economy, politics, and the pandemic at the time of this survey,” said Michael Liersch, head of advice and planning for Wells Fargo’s Wealth &Investment Management division. “These ranged from a new surge in COVID-19 infections and the October jobs report to the Nov. 3 elections and the very first announcements about the high effectiveness of certain COVID-19 vaccines.”

Liersch also says that while these events might have pulled investors’ mindsets in different directions, the net effect is positive, most likely because there is more perceived certainty about the future. “Human beings, in general, are ‘uncertainty reduction machines,’ so when uncertainty is reduced, people often feel better about, or more in control over, what’s to come,” he said.

In the fourth-quarter poll, conducted before the Dow Jones Industrial Average cracked the 30,000 barrier in late November, nearly two-thirds of investors surveyed (65%) say they feel “very” or “somewhat” confident that the stock market is a good way to build wealth for retirement. This percentage is similar to the 69% expressing this sentiment in Q2-2020 as well as in Q2-2019.

Similarly, 67% this quarter report feeling either neutral or optimistic about investing rather than fearful of a market downturn. Although lower than the 78% who reported feeling this way in 2018, today’s 67% remains a solid majority.

Pandemic causing caution

Still, Liersch says “the uncertainty and market volatility created by the pandemic might be causing some investors to continue to proceed with more caution than usual.”

While 69% say they have made no change to their cash versus investment allocations, 25% report they have kept a greater proportion of their money in cash since the start of the pandemic, significantly outnumbering the 6% who say they have invested a greater proportion in the markets. Even with this, 32% of investors surveyed say they feel they have too little cash on hand, compared with just 7% who say they have too much.

“Investors’ desire for cash makes sense, given that holding cash is one strategy they can employ to exert control over their financial security at a time when so much is out of people’s control,” Liersch said. “Liquidity affords people a sense of short-term control, while long term they may recognize that they should either be investing or staying the course in the markets.

“This dynamic can create a bit of inner conflict when making financial decisions for one’s ‘present’ vs. ‘future’ self. People wonder: Which one should I prioritize during times of uncertainty?”

Indeed, recognition of what is in vs. out of investors’ control is infused in much of their financial lives. Asked how much control they feel they have over various aspects of their financial security, 62% report feeling they have a lot of control over being able to reduce or stay out of debt.

This sentiment drops sharply to 30% in terms of saving for a comfortable retirement, 24% for generating the income they need to support their standard of living, 11% for preventing major investment losses and to just 3% for producing major investment gains.

Don't miss the big stories. Like us on Facebook.
Death Valley visitation fell to 820,000 in 2020

Death Valley National Park announced visitation fell to 820,000 people 2020, about half the number of people that visited the park the previous year.

Rally against desert solar projects planned for Saturday

Basin and Range Watch, a nonprofit organization with the slogan “Defending the Desert,” will hold a live and virtual gathering Saturday to bring attention to large-scale solar projects planned for California and Nevada.

California lottery

No one matched all five numbers and the mega number in the Wednesday, Feb. 24 drawing of the California Super Lotto. The next jackpot will be at least $24 million.

Outdoor recreation survey to help shape future projects in Nevada

What should the future of outdoor recreation look like in Nevada? What should dollars earmarked for the purpose be put toward? What kind of projects do Nevadans want to see over the course of the next few years?

Tonopah Liquor Co., where everybody knows your name

Tiffany and Marc Grigory were reminded of what kind of town their Tonopah Liquor Company serves when they were forced to close the venerable bar during the pandemic.

Pahrump Rotarians provide books to local school children

An ongoing program to increase literacy rates among area elementary school children has returned, courtesy of the Pahrump Valley Rotary Club.

Two-vehicle crash jams traffic along Highways 160, 372

No serious injuries were reported following a two-vehicle collision along southbound Highway 160, just before 12:30 p.m., on Monday, Feb. 22nd.

Credit union offering free financial education

In an effort to help youth become financially savvy, America First Credit Union is launching FUNDamentals, a customizable, financial literacy program created for kindergarten through 12th grade students and teachers.

Nye County 4-H robotics team earns prestigious awards

Awkward Silence, Southern Nye County 4-H’s competitive robotics team, took home two first-place awards at the first ever virtual FIRST Tech Challenge Southern Nevada League Championship competition this week.

HOPE Run retaining virtual format for 2021

With spring just a few weeks away and temperatures beginning to warm in the Pahrump Valley, residents’ minds are undoubtedly turning to the delights of the outdoors and what better way to get out and get active than with the NyE Communities Coalition’s annual HOPE Run?